Many Ugandans save in land, livestock, SACCOs or a bank savings account. All of these have a place, but few people know they can lend money directly to the Government of Uganda and earn interest, starting from as little as UGX 100,000.
Treasury bills and bonds are among the safest investments available locally, and they often pay much more than a regular savings account. This guide explains how they work, how to open an account with Bank of Uganda's Central Securities Depository, how to bid at an auction and what to watch out for.
What are Treasury bills and bonds?
When you buy a government security, you are lending money to the Government of Uganda. Bank of Uganda (BoU) runs the auctions on behalf of the Ministry of Finance.
- Treasury bills (T-bills) are short-term: 91 days, 182 days and 364 days. They are sold at a discount. You pay less than the face value today and receive the full face value when the bill matures. The difference is your return.
- Treasury bonds are long-term, with tenors such as 2, 3, 5, 10, 15 and 20 years. You pay roughly the face value and receive interest (a coupon) every six months, then your capital back at maturity.
Because they are backed by the government, they are considered very low risk compared with most other investments in Uganda.
Why people invest in them
- Safety: they are backed by the Government of Uganda.
- Predictable income: you know the rate and payment dates in advance.
- Low starting amount: retail investors can start from UGX 100,000.
- Planning: you can match maturities to future needs, such as school fees or a building project.
Step 1: Open a CSD account
Government securities are held electronically in Bank of Uganda's Central Securities Depository (CSD). You need a CSD account in your name before you can buy.
- Go to a commercial bank that is a primary dealer, or to Bank of Uganda, or a licensed stockbroker. Most large banks can help.
- Fill in the CSD account opening form. You will typically need your National ID or passport, a passport photo, your TIN, proof of address and details of the bank account where interest and maturities will be paid.
- Get your CSD account number. You use it every time you bid.
In 2025, Bank of Uganda upgraded the CSD and introduced a Retail Investor Module, an online portal where individuals can view their holdings, transactions and payments. Ask your bank or BoU how to register for access.
Step 2: Watch the auction calendar
T-bill auctions are generally held every two weeks, and bond auctions follow a calendar published by Bank of Uganda, usually about once a month. Before each auction, BoU publishes a notice showing the tenors on offer, the amounts the government wants to raise and, for bonds, the coupon rate. Check the Bank of Uganda website or ask your bank for the schedule.
Step 3: Place your bid
There are two ways to bid:
- Non-competitive bid: you say how much you want to invest and accept the average rate set at the auction. This is the usual route for individuals. In recent BoU bond auction notices, the non-competitive minimum was UGX 100,000 with a cap of UGX 200 million per tenor.
- Competitive bid: you state the rate you want. If your rate is too high, your bid may be rejected. Competitive bids are mainly placed by primary dealer banks and large investors, with much higher minimums.
Submit your bid through your bank or broker before the deadline, which is usually 10:00 am on auction day. Make sure the money is in your account so it can be paid on the settlement date, normally the next working day.
Step 4: Receive your returns
For T-bills, the full face value is paid into your linked bank account on maturity. For bonds, coupons are paid every six months and your capital is returned at the end. You can choose to reinvest when your T-bill matures. If you need your money early, you can usually sell bonds on the secondary market through your bank or a broker, but the price you get depends on market rates at that time.
A simple example
These figures are for illustration only. Suppose you bid for a 364-day T-bill with a face value of UGX 1,000,000, and the auction rate means you pay UGX 870,000. After a year you receive UGX 1,000,000. Your gross return is UGX 130,000. With 20% withholding tax (UGX 26,000), your net return is about UGX 104,000. Ask your bank to show you the exact figures, as the way tax is collected can affect the amount you pay or receive.
Withholding tax
At the time of writing, interest on government securities is taxed through withholding tax, deducted at source:
- 20% on T-bills and on bonds with a maturity of less than 10 years.
- 10% on bonds with a maturity of 10 years or more.
This is generally a final tax for individuals, so you do not pay further income tax on that interest. Some investors, such as certain pension funds, and qualifying infrastructure bonds may be treated differently. Tax rules can change with each budget, so confirm with URA or a tax adviser.
Risks to understand
- Inflation: if prices rise faster than your net return, your money loses value.
- Interest rate risk: if you sell a bond before maturity when market rates have gone up, you may get less than you paid.
- Liquidity: the secondary market in Uganda is still small, so selling early can take time.
- Tying up money: do not put your emergency fund into a 10-year bond.
Common mistakes to avoid
- Missing the bid deadline or not having funds ready on settlement day.
- Comparing gross rates with savings accounts without taking off withholding tax.
- Putting all your savings in one long bond. Spread across different maturities.
- Trusting anyone who promises "guaranteed" higher rates on government paper. Deal only with banks, BoU and licensed brokers.
- Not updating your bank details in the CSD, which can delay payments.
Frequently asked questions
What is the minimum amount to invest in Treasury bills in Uganda?
At the time of writing, retail investors can bid from UGX 100,000 through non-competitive bids. Confirm current minimums in the latest Bank of Uganda auction notice.
Can Ugandans in the diaspora invest?
Yes, many banks open CSD accounts for Ugandans abroad. You will need your identification documents and a bank account to receive payments. Check the requirements with your bank.
Which is better, T-bills or bonds?
It depends on when you need the money. T-bills suit short-term goals, while bonds suit long-term goals and regular income. Many investors use both.
Can I lose money?
If you hold to maturity, you receive your money and interest as agreed. Losses mainly happen if you sell a bond early when rates have risen, or if inflation is higher than your return.
Do I need a stockbroker?
No. You can invest through a commercial bank or Bank of Uganda. Some people use a licensed broker for convenience or to trade bonds listed on the Uganda Securities Exchange.
Get advice from a financial expert
This guide is general information, not financial advice. If you want help understanding auction notices, comparing your options or planning how much to invest, book a verified financial adviser on The Quick Consult for a short, practical call.